BR1M aid banked in to boost saving habit

To help people save, the government will bank in most of the 1Malaysia People's Aid (BR1M) 3.0  rather than hand out cash, a cabinet minister said today.

Second Finance Minister Ahmad Husni Mohamad Hanadzlah said that about 7 million households qualified to receive aid of between RM300-RM650 each under the handout package totaling RM3.6 billion.

From these, five million will receive their money through their bank accounts. Only two million cash vouchers will be given out.

"Based on experience earlier when we gave cash of RM500, many of the people will use up on the same day.

"We hope that by putting the funds in their bank accounts, they won't use it all (and) and a saving habit will take root," Ahmad Husni (right) told reporters at the GST forum in Kuala Lumpur.

The amount handed out was also below the budgeted RM4.2billion giveaway as registered recipients were also less than the 7.9 million who were earmarked last year.

Even though the giveaway happens just once a year, Ahmad Husni said that he hoped the money, with the use of banks, could strech to four to five months.

 

Ahmad Husni noted that the Prime Minister Najib Abdul Razak will launch BR1M 3.0 at an ordinary school, Sekolah Menengah Aminuddin Baki (in Kampung Pandan)  on February 22, instead of a grand venue.

 

He denied that BR1M was a 'political' giveaway even though it was promised as part of the BN election manifesto last year.

 

"In 2011 when we studied it, we found that people earning RM3,000 and below will be most affected (by the rising cost of living)," Ahmad Husni said, adding that higher income earners will get some other tax breaks instead.

 

For the first time, BR1M 3.0 will be extended to households with monthly incomes of betwen RM3,000 to RM4,000. They will receive RM450. 

 

Last year, the government handed out RM3 billion under its BR1M package, some months before the 13th general election in May.